Here’s why the MyDeal share price is rocketing 56% today

A generous takeover offer has taken the ASX by storm this morning.

| More on:
a woman drawing image on wall of big fish about to eat a small fish

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The MyDeal share price is soaring on Friday, leaping 56% to reach $1
  • Its gains came after supermarket giant Woolworths announced its intent to buy an 80.2% stake in the company for $1.05 per share
  • That represents a near-63% premium on MyDeal's previous close and the company's board has been quick to recommend the offer

The MyDeal.com.au Ltd (ASX: MYD) share price is launching upwards this morning after Woolworths Group Ltd (ASX: WOW) offered to buy most of the online marketplace’s shares at a 63% premium.

The supermarket giant tabled a proposal to buy 80.2% of MyDeal shares for $1.05 apiece.

The MyDeal share price closed Thursday’s session trading at 65 cents.

At the time of writing, it has surged to reach $1, representing a 55.81% gain.

Let’s take a closer look at the takeover proposition boosting the online retailer’s stock today.

Woolworths proposes MyDeal takeover

The MyDeal share price is leaping on Friday after S&P/ASX 200 Index (ASX: XJO) giant Woolworths offered to snap up most of the company’s stock for $1.05 per share.

Woolworths’ offer values MyDeal’s equity at $271.8 million and implies an enterprise value of $242.6 million.

It will also provide investors who got in on the online marketplace provider’s 2020 initial public offering (IPO) – wherein shares were offered for $1 – a 5% gain on their investment.

The MyDeal board are recommending shareholders vote in favour of the proposition. That is, unless a better offer comes along or an independent expert rules it’s not in shareholders’ best interests.

Investors representing around 76% of the company’s stock have voiced their intent to vote in favour of Woolworths’ takeover. That includes CEO Sean Senvirtne, who currently holds a 47.3% stake in MyDeal.

All the takeover goes to plan, Senvirtne will sell 60% of his holding and walk away with an 18.9% stake.

MyDeal chief product officer Kate Dockery and chief merchandising officer Dean Ramler will also retain stakes of 0.5% and 0.4% respectively.  

Senvirtne commented on the news driving the MyDeal share price sky high today, saying:

[The acquisition] will help support the growth of our retail platform by accessing Woolworths Group’s capabilities across e-commerce, supply chain, retail, loyalty and more.

The companies expect shareholders to vote on the transaction next quarter with MyDeal earmarked to be delisted after its implementation.

MyDeal share price snapshot

Today’s gains have boosted the MyDeal share price back into the long-term green.

It is now trading 34% higher than it was at the start of 2022. It’s also nearly 83% higher than this time last year.

The online retailer listed at the height of the COVID-19 online shopping boom. Its highest-ever close – at $1.71 – came on the evening following its float. The stock is currently trading 41% lower than that point.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Mergers & Acquisitions

A man stands with his arms crossed in an X shape.to indicate that not everyone is buying ASX mining shares despite the commodities rally
Mergers & Acquisitions

Link share price drops on takeover rejection

Link has rejected a takeover offer from Dye & Durham...

Read more »

Two men shaking hands on a merger.
Mergers & Acquisitions

HRL share price jumps 10% as board backs takeover from ALS

HRL has accepted ALS' takeover offer...

Read more »

A young male investor wearing a white business shirt screams in frustration with his hands grasping his hair after ASX 200 shares fell rapidly today and appear to be heading into a stock market crash
Mergers & Acquisitions

Why is the Carsales share price crashing 15% lower today?

Carsales shares are sinking on Wednesday. Here's why...

Read more »

A little girl with red hair runs excitedly with a rocket strapped to her back, trying to launch.
Mergers & Acquisitions

Guess which small-cap company is soaring 71% on a takeover bid from an ASX 200 share

ALS’ non-binding takeover offer represents a massive premium on HRL’s recent share price.

Read more »

A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price
Mergers & Acquisitions

Tassal share price rockets 14% on $1 billion takeover bid

The board of the Tasmanian-based salmon farming company believes the takeover proposal is not in the best interests of shareholders.

Read more »

Business meeting
Mergers & Acquisitions

Link share price pushes higher despite revised takeover offer

Link shares are pushing higher on Monday following a takeover update...

Read more »

Projection of two hands being shaken on a deal.
Mergers & Acquisitions

2022 has seen a record first half for ASX mergers and acquisitions. Here’s the lowdown

Deals have hit new heights in Australia so far this year.

Read more »

Man looking excitedly at ASX share price gains on computer screen against backdrop of streamers
Mergers & Acquisitions

Guess which ASX software share just rocketed 150% on takeover news

PayGroup shares are moving into uncharted territory today.

Read more »